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Suppose that annual income from a rental property is expected to star

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Suppose that annual income from a rental property is
expected to start at \$1,200 per year and decrease at a
uniform amount of \$55 each year after the first year for the
12-year expected life of the property. The investment cost
is \$7,000, and tis 7% per year. Is this a good investment?
Assume that the investment occurs at time zero (now) and
that the annual income is first received at EQY one. Click
the icon to view the interest and annuity table for discrete
compounding when i = 7% per year. The present
equivalent of the rental income equals \$. (Round to the
nearest dollar.)
Solution
\$7,476.51
present value factor = 1 / [ (1+ i)n ]
net present value = total present value - initial investment
= \$ 7476.51 - \$ 7000 = \$
476.51yearscash inflowpresent value factorpresent
valueintial
investment\$7,0001\$1,2000.9345\$1,121.402\$1,1450.8734\$
1,000.043\$1,0900.8163\$889.774\$1,0350.7629\$789.605\$9
800.7129\$698.646\$9250.6663\$616.337\$8700.6227\$541.7
58\$8150.582\$474.339\$7600.5439\$413.3610\$7050.5083\$3

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Suppose that annual income from a rental property is expected to start at \$1,200 per year and decrease at a uniform amount of \$55 each year after the first year for the 12-year expected life of the property. The investment cost is \$7,000, and tis 7% per year. Is this a good investment? Assume that the investment occurs at time zero (now) and that the annual income is first received at EQY one. Click the icon to view the interest and annuity table for discrete compounding when i = 7% per year. The present equivalent of the rental income equals \$. (Round to the nearest dollar.) Solution Answer ...
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